Westerdale v. Kaiser-Frazer Corp.

For reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling and Ackerson. For affirmance -- None. The opinion of the court was delivered by Oliphant, J.

Oliphant

[6 NJ Page 572] The question here is the legal sufficiency of service of process on a foreign corporation. On January 2, 1948, plaintiff, a resident of New Jersey, was riding in her month-old Frazer-Manhattan automobile in the State of North Carolina when, allegedly, there was a mechanical failure with respect to the steering wheel which caused the vehicle to leave the highway resulting in personal injuries

to her and property damage to her car. She instituted suit here against the Kaiser-Frazer Corporation, a corporation of the State of Nevada and Clark & Eig Motors, Inc., a New Jersey corporation, seeking to recover damages because of their joint and several negligence.

Service of process of the summons and complaint was attempted to be made upon the defendant, Kaiser-Frazer Corporation, by serving "its agent and resident servant Clark & Eig Motors, Inc., by leaving a true copy * * * with Fred M. Clark, registered agent of Clark & Eig Motors, Inc. * * *." Kaiser-Frazer Corporation moved to set aside the service on the grounds that it was insufficient in law and that Clark & Eig Motors, Inc. was not its managing agent, general agent, or any other kind of agent for it. The motion was denied on the grounds that the Kaiser-Frazer Corporation was and is doing business in this State and that the business was of such a nature and character as to warrant the inference that it subjected itself to local jurisdiction and that Clark & Eig Motors, Inc., was its general agent for the purpose of being served with process. The defendant appealed to the Appellate Division under Rule 4:2-2(a) (3) and the cause was certified here on our own motion.

We disagree with the findings of the court below.

The chain of title of the automobile in question shows that the Kaiser-Frazer Corporation sold it to the Kaiser-Frazer Sales Corporation, a corporation of the State of Nevada with its principal place of business at Willow Run, Michigan, which in turn assigned it to Motors Merchants, Inc., of Newark, New Jersey, by whom it was assigned to Carlyle Motors, Inc., the predecessors of Clark & Eig Motors, Inc.

The court below relied on the following facts: (1) Clark & Eig Motors, Inc., was an authorized Kaiser-Frazer dealer; (2) the cars sold by Clark & Eig Motors, Inc. and displayed in its showrooms were those manufactured by Kaiser-Frazer Corporation; (3) the name Kaiser-Frazer was prominently displayed on signs located on the Clark & Eig Motors, Inc. premises and one of these signs read "Kaiser-Frazer Authorized

Service"; (4) the purchase order form used by Clark & Eig Motors, Inc. for the sale of automobiles is one prepared by the Kaiser-Frazer Corporation and has on its reverse side standard terms and conditions to the effect that the Kaiser-Frazer Corporation reserves the right to change the list price of its cars without notice, that it may change models and designs, that it warrants the automobile to be free from defects in material and workmanship and that this warranty shall apply only if the car is serviced at stations authorized by Kaiser-Frazer Corporation; (5) that at the time plaintiff purchased her automobile she received an owner service policy which referred to the Kaiser-Frazer Corporation and provided that such services would be rendered free only at authorized Kaiser-Frazer stations. In addition the court below held it to be common knowledge that a manufacturer of automobiles selects, supervises and controls its dealers and the method of marketing its product, that the Kaiser-Frazer Corporation has dealers throughout New Jersey and maintains a continuous flow of its products into this State which are sold only through Kaiser-Frazer dealers and that as a Kaiser-Frazer dealer Clark & Eig Motors, Inc. is undoubtedly the recognized and accepted agent in New Jersey of the manufacturer and is generally looked upon as the protective custodian of Kaiser-Frazer's name and good will in the area surrounding its location.

While courts will take judicial notice of facts of common knowledge relating to business and occupations, such as the general course of business and the usual method of transacting it, we are unable to agree with the court below that it is common knowledge that a manufacturer of automobiles supervises and controls its dealers and the method of marketing its product. The facts in the instant case belie this assumption.

The statutes controlling the service of process upon foreign corporations are R.S. 2:26-43 and 44, as amended by the Laws of 1948, c. 356. Our rule on the subject, 3:4-4(d), is a ...

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